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While the clearance of event risk remains a debate, it certainly does clear the air for other key event to shape market in the latter half of the week.

US markets

Keeping the uptrend intact on the S&P 500 index, the market buoyed up prices at the start of the week as the jitters surrounding North Korean tensions receded. A substantial 1.0% and 0.6% gain had been clocked on the S&P 500 index and the Dow respectively. Despite high level of readiness on both US and North Korea's end, investors appear to have so far been placated by comments from US officials that military conflict is not imminent.

It is worth noting that propping up prices on Monday had been the IT and financial sectors on the S&P 500 index while the MSCI USA breakdown showed momentum stocks taking the lead, displaying that while the trending IT sector had been one of the first to face selling pressure during signs of panic, investors still remain largely trend-following as risk-off sentiment clears. However to regard that the dust have settled may be too early a conclusion given the threat that still looms as this morning’s notice from North Korea’s state media evidently showed.

US dollar movements had also intrigued in Monday's session. Short covering in USD took place alongside the buying back of equities. USD index had ticked up to trade above 93.40 this morning with the subsiding of jitters within the market. One would however note that this comes ahead of items including today’s retail sales, a recent pressure point for the US economy, and Wednesday’s Federal Open Market Committee (FOMC) meeting minutes, the latter potentially bringing back the Fed’s dovish views to the foreground. While improvements expected for retails could lead to some buying interest for the US dollar, the Fed’s outlook may eventually outweigh. Into the end of the week, the bias for US dollar remain towards the downside.

Asian markets to continue rally

With global markets ticking up on Monday, Asian markets are expected to find sustained confidence in buying the dip today. Notably, markets have shrugged off the set of softer Chinese data on Monday, entrusting performance of the market upon longer term growth. Further updates from Chinese markets are expected with M2, new yuan loans and aggregate financing due for release in the day.

Ahead of most Asian market opening today, we have certainly noted headlines citing President Donald Trump's inquiry into intellectual property practices potentially concerning China. While one to follow, the launch of any formal investigation into their Asian trade partner remain uncertain at the current moment and could contain any impact upon markets.

Yesterday: S&P 500 +1.00%; DJIA +0.62%; DAX +1.26%; FTSE +0.60%

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